Increasing Efficiency and Collections with TPC’s Outsourced AR Management Program

Hospitals are hectic, busy places, where it can be difficult to manage all aspects of operations thoroughly. This is particularly true of vendor relationships. In order to achieve optimal performance, vendors need to be held accountable for their results – for the sake of the hospital’s bottom line, contractual obligations, and the welfare of patients. 

In the world of revenue cycle, hospitals are often surprised by the number of vendors engaging with their organization. Often there are 10-20 vendors performing various services from eligibility and authorization to bad debt to denials management, and it becomes a burden for providers to keep track of it all. In the end, hospitals are generally the ones who lose, with higher vendor costs and lower than expected vendor performance. In fact, audits have found that up to 60% of accounts placed with outsourcers were inadequately serviced. This is simply unacceptable, as not only do providers deserve the best quality that vendors can deliver, but poor vendor performance can directly impact the patient experience with incorrect statements and untimely account resolution.  

In 2017, TPC’s Revenue Cycle Council (RCC) recognized vendor management as a significant opportunity that they believed they could address together. Comprised of revenue cycle leaders from each Member hospital, the RCC reviewed and evaluated vendor management companies that could provide better oversight of their current vendor relationships. They selected a partner who had demonstrated success in bridging the gap between rising revenue cycle vendor costs and underwhelming vendor performance. 

Through TPC’s data driven Outsourced AR Management Program (OAMP), Members benefit from a vendor partner that has developed an analytical approach to managing other third-party vendors. By receiving detailed data, the OAMP reviews each individual account for each selected vendor. This process allows managers to verify that the vendor is fulfilling the terms of their contract and is taking the appropriate credit for payments. It helps to increase hospital collections rates, while also increasing vendor efficiency and cost effectiveness. TPC’s partner also provides coaching and feedback to Member vendors to assist them in adjusting their processes in order to improve their overall performance. The OAMP’s end goal is not to just eliminate underperforming vendors, but to instead work with them to raise their level of performance to avoid costly transition or disruption to the hospital’s collection efforts. 

The beauty of the OAMP is its ability to use analytics to audit 100% of a hospital’s outsourced revenue cycle business—far more than the typical sample or manual audits hospital resources utilize. The OAMP review process not only frees up valuable man power to the hospital, but also drastically improves the quality and capability of vendor oversight. And besides the economic and efficiency upsides, there is also a relational one. By improving their service, vendors benefit through the betterment of both their reputation and relationship with hospitals. Ultimately, hospitals can experience considerable benefit by more closely managing their vendor relationships. As an example, one TPC Member, Hendrick Health System, reported they have realized over $3.5 million in performance improvement in the first year of using the OAMP.  

“By utilizing the vendor management software, we have been able to streamline our reconciliation processes, cut down on multiple agencies taking fees on accounts, and verify the accuracy of vendor invoicing.  Our strategic partner reviews our contracts and assists our facility in holding vendors responsible for not only their invoicing practices, but also their performance, quality and productivity.  This process has provided a unique level of transparency to the hospital, as well as the vendor,” explained Tave Kelly, Director of Business Services at Hendrick.

Engaging in the OAMP enables hospitals to manage their vendor portfolio more efficiently, improving vendor performance and collections, helping vendors to meet their contractual obligations, thereby improving the vendor-hospital relationship, the hospital’s overall efficiency, and most importantly—the patient experience. 

To learn more about or participate in the Outsourced AR Management Program, please contact Cody Waldrop, VP of Revenue Cycle, 469-366-2111 or